$2 Million Penalty Payment Would Fund Local Environmental Health Initiative

HOUSTON – Sierra Club and Environment Texas announced today that they have filed a proposed Consent Decree in federal court that would settle their Clean Air Act lawsuit against Chevron Phillips Chemical Company. If approved by U.S. District Judge Nancy F. Atlas, the settlement agreement would bring significant changes to the company’s Cedar Bayou Chemical Plant, a complex of manufacturing facilities located in Baytown that is one of the largest in the Houston area. The agreement would require:

• mandatory reductions in air emissions from “upset” events;
• extensive operational upgrades;
• enhanced monitoring of air emissions;
• payment of a $2 million penalty, which will fund a local health project.

In 2009, the environmental groups settled a similar Clean Air Act lawsuit against Shell Oil Company for violations at its Deer Park refinery and chemical plant complex. Shell similarly agreed to reduce upset emissions, and paid a record $5.8 million penalty.

“This settlement agreement represents a second major victory in our fight for clean air on Texas’s Gulf Coast,” said Neil
Carman, Clean Air Program Director for Sierra Club’s Lone
Star Chapter. “We urge other companies in the region to take note of Chevron Phillips’ willingness to work constructively with us in developing solutions to problems at the Cedar Bayou facility – problems that are not unique to Chevron Phillips.”

“Today’s settlement demonstrates once again the crucial role that citizens can and must play in the enforcement of environmental laws in Texas,” said Luke
Metzger, Director of Environment Texas. “This agreement will provide a double benefit to residents in the Houston Ship Channel area: cleaner air, and a program to treat people with health issues that may have an environmental component.”

The lawsuit, filed in August 2009, focused primarily on illegal air emissions arising from so-called “upset” events: equipment breakdowns, malfunctions, and other non-routine occurrences. The groups alleged that hundreds of Clean Air Act violations at the Cedar Bayou facility since 2003 resulted in the release of more than a million pounds of air pollutants, including toxic chemicals such as benzene and 1,3-butadiene.

Air quality in Harris County is consistently ranked as among the worst in the nation, particularly for ground-level ozone, or smog. The 1,200-acre Cedar Bayou plant, located along Interstate 10, is one of the largest sources of volatile
organic compounds (VOCs) among the 275 industrial plants in Harris County. VOCs emitted by industrial facilities during upset events – most notably ethylene, propylene, 1,3-butadiene, and butenes, which form the vast majority of upset emissions from the Cedar Bayou plant – have been found to play a particularly significant role in causing many high ozone days in the Houston-Galveston-Brazoria area.

Highlights of the proposed settlement include:

• A strict annual cap on “upset” emissions, to take effect immediately (the 35,000-pound annual cap represents an 85% reduction from the 500,000 pounds of pollutants released during upset events in 2008);
• Automatic monetary penalties for
violations of the annual emissions cap or other emission limits in the plant’s Clean Air Act permits;
• Extensive operational upgrades to reduce flaring and prevent upsets;
• Enhanced VOC monitoring in key areas of the plant to detect vapor leaks of dangerous pollutants, such as benzene and 1,3-butadiene.

In addition, Chevron Phillips would pay a $2 million penalty for its past violations. The groups believe this is the second-largest penalty in an environmental citizen enforcement suit in Texas history, after the 2009 Shell settlement. The
entire penalty payment will be used by the Baylor College
of Medicine to fund a multi-year environmental health project
in the Ship Channel area. Baylor will collaborate with existing clinics and hospitals to provide clinical services (including a mobile health clinic) to an underserved population, and will provide continuing education to physicians and other health professionals regarding a comprehensive, integrated environmental health assessment and management approach.

The Clean Air Act’s “citizen suit” provision, which allows private citizens to enforce the Act in federal court, requires a judge to wait 45 days before signing a proposed consent decree to allow time for the U.S. EPA to review and comment on it.

The proposed consent decree comes as
the Texas Sunset Commission released recommendations today
on reforming the widely-criticized Texas Commission on Environmental
Quality. The groups said their Clean Air Act lawsuits were
prompted by TCEQ’s failure to properly enforce the law.

Environment Texas advocates for clean
air, clean water, and preservation of Texas’s natural areas
on behalf of approximately 5,000 members statewide.

Sierra Club has approximately 24,000 members in Texas who
are dedicated to exploring, enjoying, and protecting Texas’ environment
and natural resources.

The groups are represented by: the National Environmental Law Center; attorney David Nicholas of Newton, Massachusetts; and Houston attorney Philip Hilder.